FHA Loan Articles
News, updates, and explanations to keep you informed.
Does Zoning Matter for VA Loans?
Many VA borrowers use their VA loan benefits to buy and own homes in traditional neighborhoods, but you shouldn't feel limited to these areas when looking for a new home. Do you live in the city? Are you looking for a condominium, multi-plex unit or other types of property not found in the suburbs?
What do VA regulations say about approving loans in a mixed-use building such as a condo or multiplex unit? Some VA borrowers see the potential income in running rental properties, and a VA mortgage for a multi-use property is tempting. Does the VA allow such use?
Yes -- as long as the borrower lives on the property as the primary residence.
When the VA decides to approve a loan on a property zoned for both residential and commercial use, there's a review of the property's "remaining economic life". If a building is appraised at having a remaining economic life of at least three decades, the Department of Veterans Affairs considers that a viable building to issue a VA home loan on; a condo set above a shop in a neighborhood, for example, would theoretically be approved for a VA home loan if it meets all other VA requirements because there is no danger of the residences in that building being phased out over the lifetime of the loan.
The remaining economic life of a building is determined in the VA property appraisal process-it's not something a real estate agent or loan officer can judge accurately. Getting this particular information is something that would become available only to a serious buyer. If you are pre-approved for a VA loan but haven't decided on a property yet, it's possible to speculate, but the decision on the viability of a commercial/residential building won't be made until the appraiser does their work.
FHA NEWS and RELATED ARTICLES
The FHA Streamline Loan option features reduced paperwork and faster processing than the initial FHA loan application, but these loans don't permit money back to the borrower as they are designed primarily to give lower payment or interest rates.
Many FHA borrowers are interested in home improvement loans or rehab loans, and there are multiple options for borrowers. There is an FHA 203(k) Rehabilitation Loan program, and the FHA and HUD also offer something called the Title I loan.
On October 1, 2011, the FHA implemented new single-family loan limits as specified by HERA. As a result, FHA reduced loan limits in the highest cost metropolitan areas of the country. Some of those have since been raised for FHA-insured loans.
A home is not eligible for an FHA loan unless it has adequate, dedicated areas for sleeping and cooking--things most house hunters would take for granted. Homes not designed with such areas can't qualify for an FHA mortgage as-is.
When it comes to FHA home loan applications, many borrowers wonder about how long their paperwork will take to make it through the review process. The application phase of an FHA loan can be stressful for some borrowers.